A new survey of employer-sponsored retirement plan participants reveals that compared to men, more women’s financial and retirement goals have been derailed and their confidence is shaken.
The study by the Nationwide Retirement Institute found that nearly two-thirds (62%) of women are either expecting to retire later than originally planned or don’t believe they will ever be able to retire because of inflation, compared to less than half (47%) of men. This is a significant jump from 2021, when only one in four women expected to postpone or cancel their retirement due to the COVID-19 pandemic, Nationwide notes.
In fact, inflation and market volatility are cited as the top retirement planning challenges among employees overall—with concerns around inflation increasing significantly since 2021. Two-thirds (66%) of employees cite inflation/rising living costs as their top retirement concern versus 53% in 2021.
Meanwhile, in addition to having to reduce savings contributions, women are also delaying their retirements to help their loved ones manage rising expenses. More than 1 in 10 (15%) women who are expecting to delay or cancel their retirement say they are doing so because they had or have to financially support a family member or friend as a result of inflation.
These setbacks are taking a toll on women’s futures and wellbeing. More than half (56%) of women feel worried when thinking about where they are at with their current retirement plan and financial investments—a 22-percentage point increase from 2021. Moreover, 57% of those who are delaying or cancelling their retirement due to inflation say it has negatively impacted their mental health, versus 48% of men.
“Inflation has made saving for retirement particularly difficult for many Americans, but we are seeing the effects among employer-sponsored retirement plan participants greatest felt by women,” says Amelia Dunlap, Vice President of Retirement Solutions Marketing at Nationwide. “I know it can be difficult to navigate the short-term challenges we’re facing with market volatility and rates of inflation. It’s critical that plan sponsors help their employees keep focused on the longer-term view, avoid emotional investing or reactions and offer solutions that will help them stay on track for their goals.”
Seeking Solutions
In addition to navigating inflation, women also struggle to optimize their income in retirement. Nationwide notes, for instance, that roughly half (51%) of female participants face challenges around turning their retirement savings into income in retirement. Only 4% of women are “moderately or extremely” familiar with retirement planning for decumulation.
Plan sponsors are seeing these concerns impacting participant behavior, with most agreeing that employees have inquired about steps they can take to better prepare for retirement (82%) or have become more focused on retirement planning (76%) since inflation/living costs began to rise.
However, more women than men are interested in solutions that can help them navigate challenges around inflation and better plan for retirement. Nearly all (92%) female plan participants say they would be at least somewhat likely to rollover a portion or all of their current retirement plan savings into a guaranteed lifetime income investment option if they were able to, compared to 83% of men.
“The start of a new year is an opportune time for plan sponsors to reevaluate their retirement offerings to ensure their participants—particularly women—are able to retire on time with greater confidence,” adds Dunlap. “Guaranteed lifetime income investment options can help participants navigate today’s high inflation and provide them with the decumulation strategy they need in retirement.”
The survey was conducted by Edelman Data and Intelligence (DxI) on behalf of Nationwide from July 14–Aug. 5, 2022. Respondents included 500 company plan sponsors/benefits decision makers; 100 public sector plan sponsors/benefits decision makers; 1,000 plan participants age 45 or older; and 100 plan participants ages 35-44.
